Lamborghinis versus 'garbage salaries': Spain battles inequality

On a tree-lined street in the wealthy Madrid suburb of Pozuelo de Alarcon a shiny red Lamborghini, placed in the showroom's prime position, courts the attention of Spain's elite.

The Italian luxury car maker opened its first dealership in Spain in the exclusive neighbourhood, home to top footballers and executives, in 2013 as the country was limping out of a steep recession caused by the collapse of a property bubble in 2008.

"It's going very well. We are meeting all our goals. We can't complain," said the dealership's salesman, Alberto Pajuelo Fernandez.

Lamborghini's success in Spain is a sign of how the rich have become richer during the country's economic downturn while the ranks of the poor have swelled, a hot-button issue in Sunday's general election.

The dealership, located on the same street as the local headquarters of Spain's ruling conservative Popular Party which is facing a stiff battle to retain power, sold nine cars last year.

Sales in 2015 are on track to match or even surpass last year's figures even though Spain's unemployment rate stands at 21.1 percent, the highest in the European Union bar Greece.

The number of millionaires in Spain -- defined as having a fortune of over a million US dollars excluding their main residence and consumer goods -- rose by 40 percent to 178,000 last year from 2008 when the crisis started, according to consulting firm Capgemini.

At the same time the number of people living with "severe material deprivation" in the country has doubled since 2007 to just over three million last year, according to a study by anti-poverty agency Oxfam.

- 'Garbage salaries' -

"I have the sense that we are on the edge of an abyss, of possible social upheaval," said the director general of the Spanish branch of Oxfam, Jose Maria Vera.

Analysts blame Spain's growing inequality on massive job losses, cuts to public services, and tax cuts and stock market gains that have mainly benefited high earners.

The government has defended its economic record, boasting in campaign ads that it has created a million jobs in the past two years.

But critics have warned of a race to the bottom on salaries, in part due to a 2012 labour market reform that gives employers more flexibility to set wages.

"High salaries always existed. What is new is the number of garbage salaries," said Vera.

Executives are the only professional category in Spain who saw their incomes rise above the rate of inflation since the start of the economic crisis, according to a study by human resources firm ICSA Grupo and the EADA Business School in Barcelona.

The average gross salary of Spanish executives rose by 14.75 percent to 78,840 ($86,625) last year from 68,705 euros in 2007, the year before the crisis started, above the cumulative inflation rate for the period of 13.1 percent.

Regular workers saw their average salary rise by 11.1 percent during the period to 21,757 euros last year.

"Executives are the only ones who have gained purchasing power," said EADA professor Jordi Costa.

One in two Spaniards, 53 percent, feel they have dropped a social class during the economic crisis, according to Belen Barreiro, a sociologist who heads the MyWord polling firm.

- 'No other choice' -

Many Spaniards who just a few years ago had easy access to trips abroad, tickets to football matches and cars are now struggling to make ends meet, while in areas like Pozuelo de Alarcon the effects of the downturn are barely felt.

For a fleeting moment in October Spain was home to the world's richest man, when Amancio Ortega, chairman of Inditex, owner of the Zara clothing chain, was propelled to the top of Forbes' wealthiest list by share price fluctuations.

He later fell back to fourth position but is still estimated by Forbes to be worth a cool 74 billion dollars (67 billion euros).

"For a handful, things are going well or even better than before, for the rest like me the last few years have been hard," said house cleaner Ligia Fernandes at a cafe near Pozuelo de Alarcon's train station before she started work at a nearby apartment.

The 47-year-old, who moved to Spain from Brazil over a decade ago, lost her permanent job at a Madrid hotel three years ago and now earns a living cleaning several apartments, earning half what she did before.